The Bretton Woods system established a new monetary order. The name comes from the place where the agreements were developed, Bretton Woods, New Hampshire. This meeting took place in July 1944. The Bretton Woods system was an attempt to avoid global economic disasters, such as the Great Depression, which began in 1929 and lasted a decade. Despite the disintegration, the Bretton Woods Summit and the agreement are responsible for a number of particularly important aspects in the financial world. First, the creation of the IMF and the World Bank. To date, these two institutions are of paramount importance to the global economy. The Bretton Woods Agreement was concluded in 1944 at a summit in New Hampshire, USA, on a website of the same name. The agreement was reached by 730 delegates representing the 44 allied nations who participated in the summit.
Delegates, as part of the agreement, use gold standard gold In the simplest terms, the gold standard uses a system to understand the value of the currency, and this means that a currency is compared to how much it is worth in gold and at what price it can be exchanged for gold. to establish a fixed exchange rate. The aim of the Bretton Woods meeting was to put in place a new system of rules, rules and procedures for the world`s major economies to ensure their economic stability. To do this, Bretton Woods founded the International Monetary Fund (IMF) and the World Bank. But on a larger scale, the agreement brought together 44 nations from around the world, who brought them together to solve a growing global financial crisis. It has helped strengthen the global economy as a whole and maximize international trade benefits. The security of money by the gold standard began to become a serious problem in the late 1960s. In 1971, the problem was so serious that U.S.
President Richard Nixon announced that the possibility of converting the dollar to gold was “temporarily” suspended. The stage was inevitably the last straw for the system and the agreement that sketched it. This criticism relates to the procedures and approaches of the two institutions. The common goal of the IMF and the World Bank can be seen as helping the world`s weakest economies and to narrow the gap between prosperity and poverty in the world. Few commentators oppose these goals. But both institutions have been accused of working in a way that not only fails to achieve these objectives, but also deteriorates the conditions of the economies they claim to want to improve.